Reception of international remittances and their impact on the domestic economy in Santiago de Cali, Colombia

Abstract

In this research, we examine the role that international remittances play in the domestic economy of recipient households in Cali, using as a primary source of information the Survey of Employment and Quality of Life, 2013. To assess the effect of remittances on the domestic economy of recipient households it was necessary to undertake a survey to identify individual beneficiaries and non-beneficiaries of remittances. In addition, an index of material well-being was constructed along the three dimensions of type of housing, type of public services, and private possessions, for those households receiving remittances and for those not doing so. Among the major findings are: a) remittances contribute to improve the quality of life of households to mitigate their basic needs, but do not contribute to the welfare of the family in the long term; b) recipient households use this source of income for immediate consumption, but also in order to improve their quality of life by investing some proportion in education and health; c) migration is a family strategy “aimed not so much to get the greatest possible income, but to diversify its sources in order to reduce risks such as unemployment” (Arango, 2000, p. 12), thus avoiding insecurity and the risk of hunger; d) the remittances to the receiving households in Cali, play an important role in the sustainability of the household as they are partly invested in developing capacities such as education which would allow less economic dependence on remittances in the future.

Keywords

• Colombia
• economía doméstica
• hogares
• migración
• remesas
• Cali.